A product strategy executive at ADP recently told me ”employees generally spend more time picking out a color TV than they do selecting their Benefit plans.” At that moment I knew the conversation would be different than any of my previous chats about payroll services. After all, I’ve never known an organization that cited a well-run Payroll operation as a major source of competitive advantage. In contrast, achieving only modest (e.g. 4%) upticks in employee productivity, perhaps from focusing more on improving employee engagement, can be a pretty big deal. The math: A 2,000-employee company that goes from $150,000 revenue per employee to $156,000 (or a 4% improvement) generates $12 million in new value ($6,000 x 2,000 employees).
Payroll Services in the digital age is where “intelligent automation” and the constancy of innovation empowers and enables all participants and customers – ergo, makes them more engaged and productive. And for newer readers of HfS fare, we basically define intelligent automation as moving from legacy technologies to a more on-demand environment that enables (as warranted) plug and play solutions/services, cognitive/AI elements, impactful analytics, highly engaging user experiences, mobile taps over mouse clicks, etc., often based on design thinking and always involving genuine customer advocacy.
To cut to the chase, my new Blueprint Report “Payroll-as-a-Service: 2017”, being published this July, will delve deeply into how Payroll Services are being transformed based on the best that intelligent automation has to offer. The Report will examine where this market is today and where it’s going, include actionable guidance for services buyers and providers, showcase innovations that are driving real business value, incorporate customer perspectives from around the globe, and of course, utilize our “As-a-Service Winners’ Circle” evaluation framework to separate market leaders from high performers and high potentials – replete with service provider analyses.
Readers wanting to see who offers great pricing for tax filing and reporting services should look elsewhere, but for those interested in digital capabilities in the form of impressive chatbots (for maximum responsiveness), benefit plan cost/benefit optimization and financial wellness support at the individual level, other types of “personalized value adds,” predictive and prescriptive guidance for managers, and other capabilities which take routine tasks out of the daily life of Payroll staff and its internal customers, we will have you covered.
Bottom Line: Payroll Services providers are jumping on the digital bandwagon with gusto, and the results belie that long-time characterization of Payroll not being sexy.
We have recently published our Blueprint Report on Industry 4.0 Services. This is our fourth engineering services Blueprint in which we analyzed and positioned twelve Industry 4.0 Service providers according to their execution and innovation capabilities. In the first one, we focused on the mechanical engineering services. In the ”second” engineering Blueprint, we looked at Software Product Engineering (SPE) services in detail. The third Blueprint was about Product Lifecycle Management (PLM) services.
What does Industry 4.0 Services Blueprint cover?
This Blueprint includes the Industry 4.0 offerings of different service providers across verticals for shop floor manufacturing. This includes their capabilities across the HfS Industry 4.0 Services Value Chain of R&D, Plan, Implement, and Operate for thirteen technologies that are relevant to Industry 4.0. These technologies are Manufacturing Data Analytics, Robots, Manufacturing Automation, Digital Clone or Simulation, 3D Printing, Manufacturing IoT, Plant Cybersecurity, Manufacturing on Cloud, Augmented Reality in Manufacturing, Virtual Reality in Manufacturing, Artificial Intelligence in Manufacturing, Visual Analytics in Manufacturing, and Small Batch Manufacturing. This report also provides insights into the internal R&D, capability, vision, investment, and partnership priorities of the service providers. We also outlined the strengths and challenges to take into consideration for these service providers. The report also mentions market analysis of the Industry 4.0 Services industry, the current focus area, and the future growth areas over the next few years. The service providers included in this report are Accenture, Altran, Atos, Cognizant, Genpact, HCL, IBM, Infosys, L&T Technology Services, TCS, Tech Mahindra, and Wipro.
What is unique in this Blueprint?
Our focus is not solely on size, revenue and global scale of the Industry 4.0 service providers but our emphasis is also on the Industry 4.0 use cases, customer case studies, service provider strategy, way service delivery is organized, the availability of industry domain expertise, investments in industry talent, academic partnerships, industry body associations, acquisitions of companies to augment industry 4.0 capabilities, etc. Also, the Blueprint includes recommendation sections for buyer enterprises as well as the service providers. Another point of emphasis in our research is the effect of digital and emerging technologies in Industry 4.0 and how service providers are enabling new ways of working with these new technologies to address industry-specific challenges and the level of innovation brought to clients. For example, we covered how service providers are leveraging existing digital capabilities (analytics, cloud, automation, IoT, AI, cybersecurity etc.), and emerging areas (robotics, augmented reality, virtual reality, 3D printing etc.) in Industry 4.0.
This Blueprint also includes Industry 4.0 market analysis. This is first of its kind of Industry 4.0 Services study where we tried to collect details of Industry 4.0 engagements and arrived at the overall current adoption level of Industry 4.0 across verticals, technologies, service lines, and geographies. This should help each Industry 4.0 service provider, Industry 4.0 software provider (technology providers related to the mentioned thirteen technologies), and enterprise to benchmark their Industry 4.0 footprints and identify their strengths as well as areas or levels of improvement. The intent of this report is to provide valuable intelligence and a reality check on what is going on in the Industry 4.0 services world.
As part of this work, we are launching Digital OneManufacturing framework (refer Exhibit 1) that provides our view of the Industry 4.0 operating model. The framework represents an integrated manufacturing operation center that has digital prowess for a manufacturer to meet future manufacturing complexities.
In brief, Digital OneManufacturing is the platform on which digital technologies meet manufacturing engineering technologies and controls a manufacturing landscape in real time to serve clients. It’s where all the process elements are combined: Connectivity, the processes, and the intelligence come together as one integrated unit, with one set of unified business outcomes tied to manufacturing organizations.
Digital OneManufacturing is the ability to do mass customization at scale so that manufacturing enterprises manufacture for one customer economically and efficiently. Please refer our PoV on Digital OneManufacturing to get more details about the framework.
What is the current state of Industry 4.0 Services market?
Since Industry 4.0 is a relatively new concept, manufacturing organizations are conservative to implement Industry 4.0 across the enterprise. Big enterprises are committing modest investment, and resources in digital manufacturing for specific manufacturing functionalities and once they realize the benefits enterprises will go for digital factory and then connected factories. Geography wise, North American manufacturing organizations are at the forefront of Industry 4.0 adoption followed by European and APAC enterprises. The automotive, aerospace and industrial equipment verticals are the leading verticals for Industry 4.0 services. Service providers are also developing industry-specific Industry 4.0 platforms, and plug-and-play solutions in partnering with Industry 4.0 related technology providers (Siemens, GE, Dassault etc.) to address specific client challenges. The biggest challenge manufacturing organizations are facing in Industry 4.0 implementation is the lack of digital maturity and enterprise readiness. Once the Industry 4.0 technologies mature, and the adoption increases, the expectation about Industry 4.0 benefit realization will be realistic.
What are we expecting in the coming years?
As discussed, Industry 4.0 is gaining traction in the manufacturing industry, and in the next few years, we will see more Industry 4.0 adoption, and increasing integration of Industry 4.0 with ERP, PLM, and other enterprise applications. It will take decades for manufacturers to implement Digital OneManufacturing at scale but surely manufacturers will make progress with the help of progressive service providers in this area in the next couple of years
Consulting is often starting point for the large Industry 4.0 programs, so service providers are augmenting their consulting capabilities. We expect to see an acceleration of this trend in the near future. Also, the market will see M&As as the global and Indian service providers will look for specific capability augmentation in Industry 4.0 space. Industry 4.0 will generate a huge amount of data in real time from every connected digital asset, so actionable intelligence from the data is of paramount importance. Thus data analytics is a differentiating factor for successful Industry 4.0 implementation. Security is also one of the most important features of Industry 4.0 as critical manufacturing, and customer data is generated and stored as a part of Industry 4.0 services.
We think there’s a high chance the grid could be very different again next time round! Stick with HfS to monitor the important changes in this rapidly evolving market!
HfS subscribers click here to access the new HfS Blueprint Report, “HfS Blueprint Guide: Industry 4.0 Services 2017“
As enterprises embark on their SaaS journeys, we’ve compiled a quick no-fuss list of tips for buyers to keep in mind. With all the marketing hype created by tech firms, certain analysts, journalists and pundits, enterprise SaaS buyers, more than ever, need to stay focused on their strategic missions and desired business outcomes. Here are five top tips to consider:
Focus on your business strategy, not a technology strategy: Business leaders, such as HCM and CRM business managers, constantly grapple with outlining a technology strategy to support their business requirements. Why? Business leaders are just that – they have a mission to improve their business performance, aligned to specific business outcomes. For example, an HCM manager may need to create a particular culture to engage and motivate employees, or a CRM manager may be charged to increase customer satisfaction. Either way, these missions should not be to use a particular type of technology or procurement method.
Don’t select SaaS because it’s cool and looks good on your CV: Too many buyers today are selecting SaaS solutions without tight alignment to the overall business strategy. Too many marketing executives’ eyes light up when you mention “Salesforce” or HR executives “Workday”.Without this, these deployments will ultimately fail. Buyers may achieve automation of mundane tasks but they will fall short of engineering any real business transformation.
Don’t care as much about which technology you use: IT is and always will be an enabler to the business objectives and requirements. It’s no more than that. One of the most important advantages of SaaS applications is that buyers are not tied to them for years, or even months. If the solution no longer works, you can drop it and find something else. Yes, there are some cost implications, but technically, it is not nearly as painful and cumbersome as trying to swap out an on-premises application.
Be careful of believing the hype – whatever the source: The ISVs are, of course, aware that you can switch a SaaS solution relatively easily. They are, therefore, laser-focused on making you stick with their solution. Antics include bundling in solutions and modules you don’t need (but will pay for) and stressing the importance of using one complete solution for integration simplicity.
Only buy what you need: The ability to integrate easily between cloud and on-premise applications is obviously very important, but SaaS buyers need to focus on exactly which modules they need to fulfill their business mission and only use and pay for those. If an alternative solution or application meets a specific business need, then don’t be afraid to use it. Let system integrators pick up the headache of integrating it all – that’s what they are paid to do.
Bottom Line: You achieve business transformation through organizational and cultural change – not with a software tool or a procurement method.
April 3rd saw the long-anticipated creation of a new IT and BPO powerhouse service provider – DXC.technology. However, DXC’s challenges represent a microcosm of a services industry in perilous transition.
This is a crucial event in the services industry, not only because it isn’t often a “new” $25 Billion services firm is created, but because of what it signifies about the uncertain state of the current market and the huge challenges facing service providers in the near future.
As an addendum, many of you have reached out to us since publishing this blog, regarding whether this was the right time for an emerging star in automation, like Genfour, to sell. There is a lot of runway in Intelligent Automation and there is no doubt in my mind that Genfour’s architect, James Hall, could have held out for longer and continued along his growth path as one of the few attractive pureplays in the space worth acquiring.
As our recent analysis of them revealed, the current bunch are not very well established, hence some want a quick cash-out and exit, while others are hunkering down to play the longer game. It is our view that Intelligent Automation and AI will evolve like the digital market, with service providers crying out for “press release buys” that give them credibility. Hence, this is as good a time as any to establish your own pureplay Intelligent Automation shop and throw yourself into the mix. But good luck finding the talent… there’s a real shortage of it out there!
So why did Accenture acquire Genfour and does this make market sense?
In times of disconcerting political and macro-economic events, where #fakenews and a traditional outsourcing model officially running out of value, getting predictions right is becoming increasingly difficult for an analyst. Hence, the more pleasing it is when you can gloat about predicting an acquisition.
Case in point, Accenture’s acquisition of UK-based Genfour, a pure-play automation services provider that will become the cornerstone of a newly formed Center of Excellence (CoE) for Intelligent Automation, located in Wales. Back in December 2016 we did gaze deeply into the automation crystal ball and suggested that similar to the acquisition of Alsbridge by ISG, the leading pure plays will be quickly absorbed by the leading management consultancies. Gloating aside, the point that this acquisition reinforces is that Intelligent Automation is at an inflection point and we are poised to see these Intelligent Automation deployments scale far beyond just RPA.
The shift from bots to data
The sense of increasing maturity and the progress toward transformational projects was also tangible at HfS’ Digital OneOffice Summit last week in New York. While tired of all the buzzwords and the lack of education and definitions, buyers were clear what they expect from their partners. They want support on their journey from bots to data and their move beyond technology. Buyers want guidance on the best organizational model to leverage and integrate automation, but also a realistic guidance on the throughput of data of the leading RPA and automation tools. Similarly, they are desperate for tapping into the talent that can advise them on the most effective architecture in order to accelerate the journey toward truly Intelligent Automation. At the same time, buyers were almost unanimous in expecting the industry to move beyond an FTE-centric mindset on automation, be it around go-to-market messages, around discussions on business cases or where exactly they require support from their partners.
The messages from New York to automation vendors, service providers and advisors were loud and clear. Yet, another message was equally clear, when we asked the buyers in the room what would improve most the quality and outcomes or their current (primary) services relationship, 49% responded with rolling out a long-term RPA and Cognitive Computing roadmap with their providers’ expert management and support. Thus, the opportunities are far greater than any challenges.
Accenture’s Genfour acquisition is all about execution
Against this background and despite the fact that financial terms were not disclosed, we view the acquisition as a strong positive for both sides. Genfour gives Accenture proven execution capabilities in Europe that allow both to fulfil strong demand around RPA but also to leverage Accenture’s broad Intelligent Automation capabilities in those deployments. (For Accenture’s and Genfour’s Intelligent Automation capabilities see the HfS Intelligent Automation Blueprint). Another way of looking at it is that Accenture gains nearshore capabilities. Crucially those capabilities are at the top end of the market as the Genfour team are the first mover with proven credentials on integrating RPA and other innovative technologies into process chains and workflows. These skills sets are extremely scarce in the market. Conversely, Genfour is selling its business just at a time when the RPA market is starting to commoditize. To move forward, it would have required deeper, external investments as the market is moving toward broader automation capabilities in particular around AI and Cognitive. And culturally it is a good fit as Genfour founder James Hall spend his formative years at Accenture.
From an IP point of view, Accenture will add its holistic automation strategy to Genfour’s Autonomic Platform which did integrate broader automation partners such as Celaton or Enate. Accenture’s capabilities focus on the Accenture Intelligent Automation Platform that integrates Business Workflow Management, Delivery Management, Intelligent Automation, and Analytics and Insights, with a neutral ERP interface at the core. This is further enhanced by the Accenture AI Engine that provides an architecture abstraction layer for interacting with various Autonomics services, such as natural language processing (NLP) and machine learning. Thus, the combined entities will accelerate deployments geared toward more data-centric models.
James Hall will move into a more sales-oriented role driving customer engagement across Europe, while Accenture will move the CoE to Cardiff and ingest as well as expand existing capabilities. There is another reference point, in addition to the depth of Accenture’s capabilities, that the deal should be seen largely from an implementation and execution perspective. But again, on the danger of sounding like a broken record, these implementation capabilities are scarce. In summary, the only challenge for Accenture is to keep the Genfour team happy in a bigger and much more process-centric, if not bureaucratic, environment.
Bottom-line: Change in mindset and forward-looking strategy on talent is where the automation rubber hits the road
The key value that the automation pure plays like Genfour add to the market, is having the talent that can assess innovative technologies like RPA as well as AI and advise on the implications of those tool sets on process chains and workflows. As the first mover of those pure plays, GenFour deserves credit for educating the market while the service providers remain coy at the side lines. This education always focused on understanding RPA as part of holistic automation strategies with a view to progress to an end-to-end process view. Not that we intend to gloat yet again, but we expect that the leading pure plays will be absorbed with a similar deal logic. That is unless we will see somebody take the bold step and invest significantly to scale out and to accelerate the journey toward an AI-enabled OneOffice strategy.
We’ve talked long and hard about the extent of digital disruption of traditional business models, so we decided to extend our research coverage into growth markets where the impact of digital is always positive. When you look at the premium whisky, for example, our research shows its impact promotes new ideas, helps foster greater team collaboration and can even provoke new Design Thinking principles. Let’s have a look at how the leaders in this space are positioned, based on our Blueprint Research Methodology:
At HfS we are expert analysts at peering into markets and evaluating the performances of the major players, so we thought “why not extend our coverage into adjacent markets where some of our analysts have years of practical, hands on experience?”. Personally, I have had more innovative client discussions comparing the various merits of single malt whiskies than which automation tools vendors have better control features.
So let’s talk to a few of our contributing analysts to understand how this market played out:
Bram Weerts, COO, HfS Research:
“I’ve tried each and every one of these buggers and you can’t beat the old Yama 18. I do love the Mac, but Yama hits the spot everytime”
Tom Reuner, SVP Intelligent Automation Research:
“I believe I’ve sampled all of these whiskies, especially when I am out at analyst conferences. I haven’t a clue which is the best, but wanted my name on the report, so I endorse whatever Bram and Phil came up with.”
Derk Erbé, VP Research:
“I believe the whisky market is ripe for digital transformation. Emerging brands like the Walmart Fireball are poised to rip the bottom out of the market”
Jamie Snowdon, Chief Data Officer:
“There’s no way I could get through our quarterly forecasts without sampling a few of these first. And the way the industry’s going, the old Walmart Fireball will only increase in popularity”
Phil Fersht, CEO:
“We may worry about robots stealing our jobs, but those bastards will never be able to drink our Scotch.”
Bottom-Line: This is only the beginning, HfS is going to extend into new markets everywhere as digital disruption takes hold
We believe we are qualified to become experts on any market where money changes hands and greats ideas emerge. Stay tuned for our forthcoming blueprints:
“Tequila Transformation – it can really change things”
“The least disgusting low-carb beers of 2017” and
“Organic wines that you really want to avoid As-a-Service”
And of course… this was an:
Please, please don’t tell me you fell for this again! …And I know some of you did =)
And while we’re reminiscing about falling for April Fools’ gags, here is 2016’s classic:
Oh dear – here are the private views of about 60 outsourcing clients we polled today at the HfS Summit in New York. Close to half the room are either feeling let down by their provider over-promising, or merely feel they are only really getting cheap labor from their relationship. Moreover, barely a third of them actually believe their provider can come up with the goods, provided they pay for them via the legacy FTE pricing model. Now, these buyers are highly experienced and sophisticated, so this data is particularly hard for the outsourcing industry to digest.
So a few simple takeaways from this:
Service providers have to stop the over-promising and start over-delivering. Over-promising may result in some short-term wins, but the implications of long-term damage caused by missing client expectations are much more hazardous. Sadly, investor pressures to sustain unrealistic growth is forcing several service providers to over-sell without the talent resources to deliver anything beyond low grade offshore delivery.
Many providers are proving their competency, but failing as proactive co-innovators. As we recently revealed, a third of senior management does see real potential in their service providers to become genuine co-innovation partners, but there is a stark difference between fantasy and reality. Providers need to prove they are willing to share risks, really roll up their sleeves with their clients – and clients need to work harder to create an environment of trust that they’ll stick with their providers, provided they are willing to co-invest with them. Design Thinking anyone? Maybe it’s time to get in a room together and figure this whole thing out.
Bottom-line: We’re going to see a lot of chopping and changing of service providers in this volatile environment.
Several buyers cited they felt their providers were too comfortable with them and were not worried they would get ejected from long-term outsourcing relationships. However, with advisors, competitive providers and RPA vendors all touting the magic 40% of cost savings through automation, the leadership layers are exerting unprecedented pressures on outsourcing governance leads to demand change. In many cases, buyers are simply bringing in advisors and RPA tools vendors themselves and running their own pilots, but eventually, they are likely to put their existing deals out for rebid to find providers willing to guarantee the RPA savings. And that is where the market is going – lots of cut-throat rebids, higher degrees of risk-taking to win business and more clients being over-promised. We’re in a vicious cycle where desperation is trumping good, pragmatic partnerships where both buyers and providers can figure out how to work together in trusted, risk/reward sharing environments.
Having opened a fair few presentations and blogs with the dramatic proclamation “RPA is dead”, this title of “RPA is growing up” might sound a tad contradictory to some. Forgive me, I’m analyst and some days my glass is half full, others it’s half empty.
I am consistently trying to hammer home my plea that we approach RPA in the context of quality service delivery in all its naked complexity – not simply this obsession with individual tools, not looking for some sort of silver bullet, not looking for simple answers.
That is what our research and this blog itself are all about. Yet, for many, RPA is code for short term, guaranteed cost take out of headcount. For others, RPA is a broader placeholder, more similar to what I would term Intelligent Automation. Despite a lot of noise in the industry, RPA and Intelligent Automation are still a very nascent market. Thus, we continue to have a blurred perception around RPA that gets aggravated by the amount of smoke and mirrors spawned out by some tool providers and well as service providers.
Against this background of #RPAfakenews, I had the pleasure of sitting down with the management team of RPA solution provider upstart UiPath in Bucharest to discuss all those implications as well as getting a sneak preview of their development roadmap.
Culture, both internally and externally, underpins UiPath’ growth trajectory
Before I dive into the details, what struck me in Bucharest was the energy and togetherness of the UiPath team. Romania might not be the obvious location for an innovative start-up, but the country has been seeing a rise shared service centers, BPO delivery centers, and their entrepreneurs are part of the global village over the last few years. UiPath’ founder and CEO Daniel Dines, one of the smartest, humblest and nicest guys in the automation community, spent years coding for Microsoft in Seattle before embarking on building his own company. And this varied experience is showing, with UiPath being one of the fast-growing RPA providers and perceived by most buyers as a mandatory inclusion in RFPs next to the likes of AutomationAnywhere and Blue Prism. Clients reference the company culture, sincerity, lack of arrogance and the flexibility in commercial terms as a key reason for partnering with UiPath. From a capability side, the stability operating in Citrix environments and the expansiveness of it recorder function – features so critical to the effectiveness of RPA – is often added to those reasons. But the growth is also underpinned and enabled by smart hires. The most recent example is Boris Krumrey, UiPath’ new Chief Robotics Officer, who was won over from Atos where he had built out compelling automation capabilities around the notion of service orchestration.
Service orchestration is underpinned by operational analytics and cognitive computing
Service orchestration is the segway to understanding UiPath’s strategy. Aligned with the notion of service orchestration, UiPath is driving towards an integrated platform approach with end-to-end business process automation in mind. To achieve this, the company aspires to be an RPA eco-system player that integrates capabilities, in particular around operational analytics and the broader notion of cognitive computing. Examples include the integration of Google and Microsoft libraries, and also partnerships with providers, such as AABBYY and Elastic Search and Kibana for OCR integration and Data Analytics.
The capabilities of Elastic Search and Kibana will also underpin UiPath’s effort to advance to robot orchestration. However, the journey toward service orchestration goes beyond just tools and technologies. UiPath is trying to change the mindset in many RPA discussions and the notion of knowledge transfer is central in that regard. Consequently, UiPath is working on enhancements and tools to overcome the knowledge transfer challenges to create RPAs on robots quicker, but also in technical complex settings. At the same time, the company is beefing up partner support, training and certifications to put the evolving partner ecosystem on a much more solid platform. In a nutshell, UiPath’s platform strategy mirrors the orchestration efforts of the leading service providers that we have covered at great length at HfS. (link to the RPL)
UiPath’ platform strategy embraces the principles of the Digital OneOffice
Boris’ experiences at Atos can clearly be seen in other elements of UiPath’ roadmap and are aligned with HfS’ Intelligent Automation Continuum. Two examples for that: On the one hand, the integration of broad cognitive capabilities into the platform not least to lower maintenance costs. On the other hand, the extension of integrating automation capabilities to notions of a Virtual Agents akin to Atos AVA which Boris introduced there during his tenure. This extension to digital channels and intelligent sensor aligns UiPath strongly with our Digital OneOffice framework that suggests provider must enable customers to connect their back, middle and front offices. Thus, it is not about individual tools but about enabling a Digital Underbelly. As my esteemed colleague, Phil Fersht puts it, “Digitally-driven enterprises must create a Digital Underbelly to support the front office by automating manual processes, digitizing manual documents and leveraging smart devices and IoT where they are present in the value chain. Enterprises simply cannot be effective with a digital strategy without automating processes intelligently.”
Bottom-line: Service providers must educate, not obfuscate the market
The discussions with UiPath reference the increasing maturity in the market with a shift away from rudimentary process automation towards enabling higher value transformation projects. Yet, for those discussions to become the benchmark for the broader industry, the stakeholders and in particular the service providers, have to start properly educating the market, rather than continue to obfuscate it with smoke and mirrors. RPA clearly is growing up and maturing. But the marketing and broader discussions are not yet reflecting this reality. We urgently need a new set of custodians to translate these insights into publicly available best practices. To support exactly that, we would love to extend these discussions with other RPA providers about their roadmaps and insights.
In retail, capturing data in real-time at the Point of Sale (POS) leads to better stock replenishment and more informed customer interactions and experiences. Now take that same concept into business operations with HR and employees, where transaction or event participants similarly have the biggest vested interest in achieving maximum data accuracy and transaction processing speed.
The principles of real-time data updates and logical transaction ownership led to a lot of new Employee and Manager Self Service functionality in the early days of HCM systems. Let’s also remember, though, that self-sufficiency — as in not having to deal with the occasional black hole that some HR Departments are identified with — is also directly correlated with stakeholder or customer satisfaction.
All of this “transactional mumbo jumbo” can be boiled down to one phrase: Human Capital Management stewardship … and also perhaps one question: Where should primary HCM ownership lie? The “HR as necessary interloper to keep the company out of trouble” model hasn’t really endeared itself to many outside of those running professional HR organizations. So why keep “workforce management activities to drive enterprise value,” aka HCM, strictly in the hands of the HR Department? No reason. It’s a stupid waste of resources – both financial and human.
HR adds the most value, by far, when it enables line managers to be effective stewards of HCM
How do you as an HR professional accomplish this?
(1) by truly understanding the business of your internal line manager customers (2) by being a trusted advisor when it comes to HCM-related opportunities and risks (both — not just risks!) (3) by syndicating best practices, tools, standards and innovations related to HCM across the organization … whether an HR-borne idea, an internal customer’s idea or something learned at a professional HR organization’s conference.
Business leaders don’t just have P&L responsibility. They interact with their teams every day, in all situations, and they ideally have the “HCM acumen” to know what will drive employee engagement, retention and productivity … or conversely, what will impede these outcomes and how to mitigate those impediments.
Bottom Line: HR Departments must place a huge emphasis on line manager enablement, thereby shifting HCM stewardship to where it belongs – to team leaders, department managers, and senior executives. HR Departments should enable, or get out of the way.
